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HomeMy WebLinkAboutresolution.council.109-01 RESOLUTION NO. /E)7 (Series of 2001) A RESOLUTION OF THE CITY COUNCIL OF ASPEN, COLORADO, AUTHORIZING AN AMENDMENT TO A CONTRACT TO BUY AND SELL REAL ESTATE FOR THE PURCHASE OF THE YOUTH CENTER BUILDING; APPROVING A LEASE AGREEMENT WITH THE YOUTH CENTER FOR NEW SPACE TO BE CONSTRUCTED AT THE ISELIN PARK AND RECREATIONAl_ COMPLEX; AND, AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE ALL REQUISITE DOCUMENTS TO CONSUMMATE THE PURCHASE OF THE YOUTH CENTER BUILDING AND THE LEASE AGREEMENT. WHEREAS, the City Council desires to purchase the existing Youth Center building located on the Rio Grande Subdivision; and WHEREAS the City Council desires to lease to the Youth Center certain space at the new Iselin Park and Recreational Complex building. NOW, THEREFORE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, THAT: Section 1 The City Council does hereby approve that certain Contract to Buy and Sell Real Estate between the Youth Center as Seller and the City of Aspen as Buyer for the purchase of the existing Youth Center Building on the Rio Grande Subdivision appended hereto as Exhibit "A" and hereby authorizes the City Manager to execute the same on behalf of the City of Aspen. Section 2 The City Council does hereby approve that certain Lease Agreement between the Youth Center as Lessee and the City of Aspen as Lessor for the lease of space at the new Iselin Park and Recreational Complex appended hereto as Exhibit "B" and hereby authorizes the City Manager to execute the same on behalf of the City of Aspen. Section 3 The Mayor and City Manager are hereby authorized to execute such other documents as may be necessary prior to or at closing to consummate the transactions contemplated by the Contract to Purchase Real Estate and Lease Agreement. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day hereinabove stated. Kathryn~. Kocff, City Clerk JPW-11/15/2001-G: \j ohn\word\resos \youthcenter-purchas~. doc CONTRACT TO BUY AND SELL REAL PROPERTY YOUTH CENTER BUILDING THIS CONTRACT, made and entered on this ,2001, by and between the City of Aspen, a home cule mummpal corporation ("Purchaser"), and the Youth Center, a not-for-profit organization incorporated in the State of Colorado ("Sell&'). WITNESSETH, that Purchaser, Seller and Pitkin County entered into that certain Lease Agreement dated October 31. 1991, whereby the Seller has leased from the Purchaser certain property in the City of Aspen upon which the Seller has constructed a building commonly referred to as the Youth Center Building (the "Building"); and WHEREAS, the Seller wishes to sell the Building; and WHEREAS, the City of Aspen desires to purchase the Building from Seller; and WHEREAS. the said Lease Agreemem sets forth certain terms and conditions in the event that Seller desires to sell the Building; and WHEREAS, the parties hereto agree that the purchase price for the Building should be the cost of constructing new space for the Youth Center at the City owned Iselin Park Recreational Complex (the "New Space") and other consideration set forth herein; and WHEREAS. the parties have agreed upon the terms cfa new Lease Agreement by which the City shall lease to the Youth Center the land upon which the New Space shall be situated; a copy of which is appended hereto as Exhibit A (the "New Lease Agreement"). NOW, THEREFORE, the parties hereto, for the consideration hereinafter set forth, agree as follows: 1. PARTIES AND PROPERTY. The City of Aspen agrees to buy and the Seller agrees to sell. on the terms and conditions set forth below, the building commonly referred to as the Youth Center Building located in part on the Rio Grande Subdivision and in part on the Pitkin County Center Subdivision in the City of Aspen, Colorado (the "Building"). 2. PURCHASE PRICE AND TERMS. The total purchase price for the Building shall include the following consideration: a. The City hereby agrees to build New Space for the Youth Center at the City's Iselin Park Recreational Complex under the terms and conditions as set forth below: Contract to Buy and Sell Real Property Youth Center Building Page 2 i. Plans and St)ecifications of New Space. The parties hereto have agreed to the design and location of the New Space and hereby agree that Exhibit B appended hereto and entitled "Final Plans for Design and Location of the Youth Center Space al Iselin Park" shall constitute the final agreed upon plans, specifications, design, cost estimate, timing, location, onsite improvements, and other pertinent issues relating to the construction of the New Space. The New Space shall include, at a mimmum, 6,221 square feet. The finishes of the space shall be of a "moderate" quality as determined by the City's Asset Manager, and shall be of a quality agreed to by the parties and as reflected on Exhibit B appended hereto. ii. Cost. The City shall construct the New Space as described at sub- section a, above, at the City's sole cost. Based upon a 5% allocation of all common area costs to the New Space, the total hard construction costs of the New Space shall be $1,240,753.00. In addition, the City shall pay for $159,247.00 of internal furnishings and finishes. The added cost of any finishes that are considered to be better than a "moderate' grade as reflected on Exhibit B shall be paid for by the Youth Center. b. The City agrees to execute the New Lease Agreement referenced above for the land upon which the New Space will be constructed. 3. CONTiNGENCIES. The transactions contemplated herein are specifically contingent upon the following: a. Evidence satisfactory to Purchaser that the portion of the property which lies under the Building within the Pitkin County Center Subdivision has been properly subdivided and eligible for conveyance from Pitkin County to the Purchaser. Purchaser shall take all steps reasonably necessary to apply for and obtain subdivision approval of the Pitkin County Center Subdivision. b. Evidence satisfactory to the Purchaser that Pitkin County has transferred ownership to the Purchaser of the property that lies under the Building within the Pitkin County Center Subdivision. Pumhaser shall take all steps reasonably necessary to obtain a deed from Pitkin County for the property that lies within the Pitkin County Center Subdivision. c. The parties hereto execute a new Lease Agreement in substantially the form as set forth in Exhibit A appended hereto and by this reference made a part hereof. d. The Seller terminates or assigns any lease agreements between Seller and the operator/owner of the Underground Restaurant located in the Building, and any other lease agreements that may survive closing. Contract to Buy and Sell Real Property Youth Center Building Page 3 e. This Contract is specifically contingent upon approval by the Aspen City Council of a Resolution authorizing the City Manager to proceed with this Contract and to execute ali requisite documents to consummate the transaction as set forth herein. 4. TITLE. a. Seller shall furnish to Purchaser a Bill of Sale for the Building in substantially the form and content of the document appended hereto as Exhibit C along with an assignment to Purchaser of any warranties covering all appliances, equipment and other fixtures of the Building. b. Matters Not Shown by the Public Records. Seller shall deliver to Purchaser, on or before ten days prior to the date set for closing, tree copies of all leases(s) and survey(s) in Seller's possession pertaining to the Building and property(les) upon which the Building has been built and shall disclose to Purchaser all easements, liens and other title matters not shown by the public records of which Seller has actual knowledge. Purchaser shall have the right to inspect the Building to determine if any third party has any right in the Building not shown by the public records (such as unrecorded easements, unrecorded lease, or liens). Written notice of any unsatisfactory condition(s) disclosed by Seller or revealed by such inspection shall be signed by or on behalf of Purchaser and given to Seller on or before the date set for closing. If Seller does not receive Purchaser's notice by said date, Purchaser accepts title subject to such rights, if any, of third parties of which Purchaser has actual knowledge. c. Right to Cure. If Seller receives notice of unmerchantability of title or any other unsatisfactory title condition(s) as provided in subsection (a) or (b) above, Seller shall use reasonable effort to correct the unsatisfactory title condition(s) prior to the date of closing or may seek an extension of the closing date of no more than ten (10) days, unless extended for a longer period of time by mutual consent of the parties hereto. If Seller fails to correct said unsatisfactory title condition(s) on or before the date of closing, this contract shall then terminate, provided, however, Purchaser may, by written notice received by Seller, on or before closing, waive objection to said unsatisfactory title condition(s). 5. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SEI,I,I~.R Seller hereby covenants, represents and warrants to the Purchaser the following, all of which shall be true, accurate and complete as of the date hereof and shall survive the closing: a. Status and Authori _ry. Seller has the fight, legal capacity and authority to enter into and perform its obligations under this Contract, and the documents to be executed and delivered pursuant thereto. b. No Liabilities. Prior to or at the time of closing, Seller shall pay, or otherwise secure the release of, every debt, account payable, !lability or obligations or any nature whatsoever, contingent or otherwise, that is, or could become, a lien or other encumbrance against the Building, and Seller shall not engage in any action with respect to the Building Contract to Buy and Sell Real Property Youth Center Building Page 4 between the date of execution of this Contract and the closing date that could give rise to a lien or claim against the Building. c. Litigation. No action, suit or proceeding is pending or, to the best of Seller's knowledge, threatened against the Building or Seller or affecting Seller's interest in, management of, or other activities with respect to, the Building. Seller is not in default of any order of any court, arbitrator or governmental body respecting the subject Building. d. No Notice of Violation. Seller has no knowledge of and has received no notice of any pollution, health, safety, or environmental violation with respect to the Building or any portion thereof which has not been cured. e. No Conflict. The execution and delivery of this Contract and the documents required hereunder, and the consummation of the transactions contemplated herein, will not: (1) conflict with or be in contravention of any prowsion of any law, order, rule or regulation applicable to Seller or the Building; (2) result in the breach of any of the terms or provisions of, or constitute a default under, any agreement or other instrument to which Seller is a party, or by which it or any portion of the Building may be bound or affected; (3) permit any party to terminate any such agreement or instrument or to accelerate the maturity of any indebtedness or other obligation of the Seller; or (4) result in any lien, charge or encumbrance of any nature on the Building other than as permitted by this Contract. f. True and Correct Information. To the best of Seller's knowledge, no document, certificate or written statement furnished to the Purchaser and its attorney by Seller in connection with this transaction contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary in order to make the statements contained therein not misleading. Additionally, Seller has disclosed all encumbrances and/or defects in title not shown by the public records and all title documents of which Seller has actual knowledge. g. Use of Property Pending Closing. Between the date of this Contract and the closing date, Seller: (i) Shall maintain the Building in its current condition, normal wear and tear excepted; (ii) Shall not permit the Building to be used or operated in any manner that would be in violation of any local, state or federal law or regulation. h. No Other Contract There are no other contracts or agreements, oral or written, which affect the Building, which will survive the closing, except as disclosed by Seller provided to the Purchaser pursuant to this Contract. 6. CLOSING. The parties hereto agree that closing shall be scheduled at a mutually convenient date and time, but no later than two weeks following the completion of the New Contract to Buy and Sell Real Property Youth Center Building Page 5 Space, evidenced by the issuance of a Certificate of Occupancy by the Aspen/Pitkin County Building Department. At closing, the following title documents shall be executed and conveyed: a. The City shall convey title to all furnishings.and fixture in the New Space to the Youth Center by Bill of Sale free and clear of any liens or claims whatsoever except the terms of this contract and that certain Lease Agreement; b. The Youth Center shall convey title to the Building to the City by Bill of Sale free and clear of any liens or claims whatsoever except the terms of this contract and tl~at certain Lease Agreement; and c. The parties hereto shall execute that certain New Lease Agreement (Exhibit A); and d. Such other documents reasonably necessary to consummate the transaction contemplated herein. 7. CLOSING COSTS, DOCUMENTS AND SERVICES. a. The parties hereto shall pay their respective closing costs at closing, except as otherwise provided herein. b. The parties hereto shall sign and complete all customary or required documents at or before closing. 8. POSSESSION. Possession of the Building shall be delivered to the Purchaser at a mutually convenient date and time, but no later than on the date of closing. Possession of the New Space shall be delivered to the Seller on the date of closing. If Seller or Purchaser, after closing, fails to deliver possession on the date herein specified, Seller or Purchaser shall be subject to eviction and shall be additionally liable for payment of $500:00 per day as liquidated damages from the date of agreed possession until possession is delivered. 9. TIME OF ESSENCE/DEFAULT/REMEDIES.' Time is of the essence hereof. If any note or check received or any of the payments due hereunder is not paid, honored or tendered when due, or if any other obligation hereunder is not performed within the time frames specified herein, there shall be the following remedies: a. IF THE PURCHASER IS IN DEFAULT, then Seller may elect to treat this Contract as canceled, in which case all payments and things of value paid hereunder shall be forfeited and retained on behalf of Seller, and Seller may recover such damages as may be proper, or Seller may elect to treat this Contract as being in full fome and effect, whereupon Seller shall have the right to an action for specific performance or damages, or both. b. IF SELLER IS IN DEFAULT, the Pumhaser may elect to treat this Contract as terminated, in which case all money payments and things of value paid hereunder Contract to Buy and Sell Real Property Youth Center Building Page 6 shall be returned forthwith to the Purchaser and the Purchaser may recover such damages as may be proper, or may elect to treat this Contract as being in full force and effect, whereupon the Purchaser shall have the right to an action for specific performance or damages. c. Anything to the contrary herein notwithstanding, in the event of any litigation arising out of this Contract, the court may award to the prevailing party its reasonable costs and expenses, including attorneys and expert witness fees. 10. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES. The covenants, representations, warranties and indenmities made by the parties to this Contract, and the obligations and agreements to be performed or complied with by the respective parties hereunder on or before the closing date, shall survive the closing, but shall terminate and be of no further force and effect on the third anniversary of the date of closing. 11. ENTIRE AGREEMENT. This Contract constitutes the entire agreement between the parties hereto, and supersedes all prior and contemporaneous agreements, representations and understandings of the parties regarding the subject matter of this Contract. No supplement, modification or amendment of the Contract shall be binding unless executed in writing by the parties hereto. 12. COUNTERPARTS. This Contract may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 13. BINDING EFFECT. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successor and assigns. The Purchaser may in its sole discretion, and without the prior consent of Seller, assign all of the Purchaser's right hereunder to, or cause title to the Building to be taken in the name of non-profit nominee(s) selected by the Purchaser. 14. RECOMMENDATION OF LEGAL COUNSEl,. By s~gning this document, the parties hereto acknowledge the advisability of obtaining the advice of independent legal regarding examination of title documents and the terms of this Contract. 15. GOVERNING LAW. This Contract shall be governed by and be construed in accordance with the laws of the State of Colorado and the parties hereto hereby consent to the exclusive jurisdiction of the Colorado state courts in the event of any controversy or suit arising hereunder. 16. SEVERABIL1TY If any prowsion of this Contract is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions of this Contract shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Contract to Buy and Sell Real Property Youth Center Building Page 7 17. TERMINATION. In the event this Contract is terminated for any reason, pursuant to the terms hereof, all money payments, with any accrued interest, and things of value paid hereunder shall be returned forthwith to the Purchaser. 18. NOTICES. All notices and other communications tendered in connection with this Contract shall be in writing, and shall be deemed to have been duly given when delivered in person or by telefax, or on the fourth day after mailing, if mailed registered or certified mail, postage prepaid and properly addressed as follows: To Purchaser: Office of the City Manager City of Aspen 130 South Galena Street Aspen, Colorado 81611 With a copy to the City Attorney at the same address. To Seller: Aspen youth Center P.O. Box 8266 Aspen, Colorado 81612 With a copy to: Rhonda Bazil, Esq. 632 East Hopkins Aspen, Colorado 81611 19. FACSIMILE TRANSMISSIONS. It is mutually agreed upon by all the parties to this Contract that, if necessary, facsimile communication shall be an acceptable and binding form of communication. An original shall be provided to the other party(ies) at closing with original signatures. 20. TIME LIMITFORACCEPTANCE. Purchaser's offer as set forth in this instrument is time limited as set forth below. If this proposal is accepted by Seller in writing and Purchaser receives notice of such acceptance on or before , at 4:00 p.m. in Aspen, this instrument shall become a contract between Seller and Purchaser, subject only to the terms and conditions set forth herein (including the contingencies listed at Section 3), and shall inure to the benefit of the heirs, successors and assigns of such parties. CITY OF ASPEN: Contract to Buy and Sell Real Property Youth Center Building Page 8 City l~anager Date (This section to be completed by Seller) 21. Seller accepts the above proposal this day of ,2001. THE ASPEN ~7,0UTH CENTER By: ; Title: )~ff ~-d ~1_'~ Date Contract to Buy and Sell Real Property Youth Center Building Page 9 EXHIBIT LIST to CONTRACT TO BUY AND SELL REAL PROPERTY Exhibit "A" - Lease Agreement for New Space Exhibit "B" - Final Plans for Design and Location of Youth Center Space Exhibit "C" - Bill of Sale JPW-lO/22/2001-G ~john\wordkagr\youthcenter,doc LEASE AGREEMENT THIS LEASE AGREEMENT is made and executed on ,2001, by and between the CITY OF ASPEN, Colorado, a home rule municipal corporation (hereinafter referred to as the "Cit5~' or "Lessor"), and the ASPEN YOUTH CENTER, a not-fur-profit organization incorporated under the laws of the State of Colorado, (hereinafter referred to as the "Youth Center" or "Lessee"). WlTNESSETH: WHEREAS, the City and the Youth Center entered into that certain Contract to Buy and Sell Real Property whereby the City agreed to purchase and the Youth Center agreed to sell the Youth Center Building constructed and operated by the Youth Center on the Rio Grande Subdivision in the City of Aspen; and WHEREAS, the Contract to Buy and Sell Real Property is specifically conditioned upon the parties executing a new lease agreement for New Space to be constructed at the Iselin Park Recreational Complex (the "Demised Premises") for the Youth Center and lease to the Youth Center the land upon which it is to be located at the proposed Iselin Park Recreational Complex; and WHEREAS, the parties hereto desire to execute a new lease agreement which sets forth the agreement of the parties hereto in this regard; and WHEREAS, the City and the Youth Center are authorized to enter into this lease for the proposes set forth herein. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties herein contained, the parties hereto agree as follows: 1. Demise and Description. The City leases to Youth Center and Youth Center leases fi.om the City, for the purpose of conducting that lawful activity as hereinafter described and for no other purpose, that certain real property (hereinafter "Demised Premises"), situated at the Iselin Park Recreational Complex in the City of Aspen, County of Pitkin, State of Colorado, and more particularly described in the schedule attached hereto as Exhibit A and made a part hereof. 2. Representation by the Parties. a. The Lessor hereby represents that the Demised Premises are owned by Lessor in fee, subject only to restrictions established by the general planning and zoning code of the City of Aspen, Colorado, and any state of facts which an accurate survey or physical inspection would show. Lessee, by entenng into this Lease, agrees that Lessee is satisfied as to Lessor's title to the Demised Premises and has found the same to be satisfactory. Lease Agreement City of Aspen and Youth Center Page 2 b. Lessor hereby covenants, subject to the terms and conditions herein provided, that Lessee shall have the sole, peaceable and uninterrupted use and occupancy of the Demised Premises during the term of this Lea~e, for so long as Lessee performs all covenants herein agreed to be performed by Lessee. c. Lessee hereby represems that it is a not-for-profit organization incorporated under the laws of the State of Colorado, that it is operated exclusively for charitable purposes as those terms are defined by Article X, Section 5 of the Colorado Constitution; and, that it has received tax exempt status from the Internal Revenue Service pursuant to Section 501(c)(3) of the IRS Code. 3. Term. Subject to Lessee's satisfactory adherence to ail of the terms and conditions herein, the term of this Lease shail be for an initial period of ten (10) years. Lessee shall have the option at the end of the initial term to renew for an additional Lease term often (10) years. Thereafter, Lessee shall have two (2) additionai options to renew for ten (10) additionai years each. (The total term of this Lease shall not exceed forty (40) years; an initial term of ten (10) years and three (3) optional renewal terms of ten (10) years each.) The Lease terms described herein are subject to the Events of Default provisions set forth herein. The renewal terms shail be renewed automatically unless Lessee provides written notice, six (6) months prior to the end of the term, that it does not intend to renew its option. At the conclusion of the forty-year term, Lessee shall have the right to request that the Lessor negotiate ~n good faith an extension of the lease for an additional period of time. Lessor hereby agrees to negotiate in good faith such an extension. In the event that the parties at the conclusion of the forty-year lease term do not negotiate a new lease agreement, the provisions of Section 4 below shall apply to determine the fair market value of Lessee's interests in the property. 4. Determining Value of Demised Premises at Conclusion of Forty-year Lease Term. At the conclusion of the forty-year lease term (and only at the conclusion of the forty-year lease term), should Lessee desire not to seek to renew the lease, or the parties are unable to negotiate a new lease following good faith efforts to do so, the Lessee shall have the right to have its leasehold interests in the property valued and seek to have the Lessor compensate the Lessee for the value of Lessee's leasehold interest. In the event that Lessee's leasehold interests need to be valued, the parties agree that Lessee's leasehold interest shall be valued in the following manner and under the following assumptions: a. If the parties are unable to agree upon an appraiser, each shall nominate an appraiser and the two appraisers so nominated shall engage a third appraiser who shall resolve all conflicts that may arise during the appraisal process, including, but not limited to the final value. b. The appraisal shail be based upon the fair market value of a leasehold interest in the Demised Premises for a period of forty-years starting on the termination date of this Lease Agreement (forty-years term.) Lease Agreement City of Aspen and Youth Center Page 3 c. The appraisal shall be based upon the condition of the Demised Premises at the time of the appraisal. 5. Rent, common maintenance costs, and utilities a. Lessee shall pay Lessor as rent for the Demised Premises an annual basic rent of One Dollar ($1.00) to be paid on the anniversary date of the Lease for each year of the Lease term. b. Except as otherwise provided herein, the rent provided for in this Lease, shall not include expenses or charges with respect to the Demised Premises, including maintenance, repairs, costs of construction and replacement of buildings, insurance, utilities, taxes and assessments now or hereafter imposed upon or related to the Demised Premises. Lessee shall bear and pay for all such charges. c. Lessee shall be granted an annual credit of $25,000.00 for common maintenance and utility costs. If the total of all common maintenance and utility costs exceed $25,000.00 in any calendar year, Lessee shall be responsible for its proportional share of all common maintenance and operating costs of the entire Iselin Park Recreational Complex and for all water, gas, heat, light, power, telephone service, garbage removal, cable television, or any other public utilities of every kind furnished to the Demised Premises throughout the term hereof. The proportional share shall be calculated on the basis of square footage of the Demised Premises to the total square footage of the Iselin Park Recreational Complex. The $25,000.00 annual credit shall be increased on the anniversary by the percentage increase in the Urban Index during the twelve-month ending on March 31 of each calendar year. (Urban Index and a description of calculating index changes is attached hereto as Exhibit ~B".) d. The Youth Center shall be responsible for any other maintenance or operational costs associated with its activities and City shall have no responsibility of any kind for any thereof. 6. Use of Demised Premises. a. The Demised Premises shall be used by Lessee for the purpose of establishing and thereafter maintaining a meeting place for the youth of the City of Aspen and surrounding area. b. Lessee shall not use, or permit the Demised Premises, or any part thereof, to be used, for any purpose or purposes other than the purpose for which the Demised Premises are hereby leased; and no use shall be made or permitted to be made of the Demised Premises, or acts done, which will cause a cancellation of any insurance policy covering the Demised Premises located on the premises, or any part thereof, nor shall Lessee Lease Agreement City of Aspen and Youth Center Page 4 sell, or permit to be kept, used, or sold, in or about the Demised Premises, any article which may be prohibited by the requirements, pertaining to the Demised Premises, of any insurance organization or company, necessary for the maintenance of insurance, as provided herein, covering any building and appurtenances at any time located on the Demised Premises. c. Lessee shall not sell, or permit to be kept, used, or sold, in or about the Demised Premises, any illegal drugs, non-medicinal alcohol, or tobacco products, except in accordance with a special event permit issued by the City of Aspen pursuant to the Aspen Municipal Code. d. Lessee agrees to comply with all present and future federal, state and municipal laws, rules and regulations in its use and occupancy of the Demised Premises. e. Lessee shall not sell, convey, assign, transfer, sublease, pledge, surrender or otherwise encumber or dispose of this Lease, the Demised Premises, or any interest or estate created herein, except that Lessee shall have the right to pledge or othenvise encumber the Demised Premises in an mount not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00); provided, however, that any such encumbrance is made only after thirty (30) days prior written notice to the City; and, provided further, that any such encumbrance is made subservient and secondary to the City interests in the Demised Premises as set forth in this Lease. f. Lessee shall not commit, or suffer to be committed, any waste on the Demised Premises, or any nmsance. g. Lessee shall not erect, install, operate nor cause nor permit to be erected, installed or operated ~n or upon the Demised Premises any temporary or special event sign(s) or other advertising device that is not consistent with the general rules applicable for the Demised Premises without having obtained the written consent of the City Manager for the City. Such consent may or may not be given at the City Manager's sole discretion. 7. Taxes, Other Governmental Charges and Utili _ty Charges. a. The parties contemplate that the Demised Premises will be used strictly for charitable purposes and, therefore, that the Demised Premises will be exempt from all taxes presently assessed and levied with respect to real property. In the event that the use, possession, construction or equipping of the Demised Premises is found to be subject to taxation in any form, the Lessee shall pay same as they respectively come due; provided that, with respect to any govenmaental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during any individual term of the Lease. City of Aspen and Youth Center Page 5 b. Lessee may al its expense and in good faith contest any taxes, assessments, and other charges and, in the event of any such contest, may permit the taxes, assessments, or other charges so contested to remain unpaid during the period of such contest and an appeal therefrom unless the City shall notify the Lessee that, in the opinion of the City Attorney, by nonpayment of any such items the title will be materially endangered or the Demised Premises or any portion thereof will be subject to loss or forfeiture, or the City will be subject to liability, in which event such taxes, assessments, utility or other charges shall be paid forthwith; provided, however, that such payment shall not constitute a waiver of the right to continue to contest such taxes, assessments, utility or other charges. 8. Alterations. a. Lessee may at its own expense make reasonable and necessary alterations or improvements to the Demised Premises. All alterations, additions and improvements shall be performed in a workmanlike manner, in accordance with all applicable building and safety codes, and shall not weaken or impair the structural strength or lessen the value of the premises. Lessee shall give Lessor written notice no less than thirty (30) days in advance of the commencement of any construction, alteration, addition, improvement, or repair estimated to cost in excess of Ten Thousand Dollars ($10,000.00). b. Lessee agrees that prior to any construction or installation of alterations, additions or ~mprovements, Lessee shall post in a conspicuous place witkin the Demised Premises a notice of non-liability for mechanic's lien as specified at Section 38-22-105, C.R.S. on behalf of the Lessor and shall notify Lessor of such posting and the exact location of the same. Perfection of a mechanic's lien against the Demised Premises as a result of Lessee's acts or omissions may be treated by Lessor as a material breach of this Lease. 9. Liens. a. Lessee shall keep all of the Demised Premises and every part thereof and all buildings and other improvements at any time located thereon free and clear of any and all mechanics', materialmen's and other liens for or arising out of or in connection with work or labor done, services performed, or materials or appliances used or furnished for or in connection with any operations of Lessee, any alteration, improvement, or repair or addition which Lessee may make or permit or cause to be made, or any work or construction, by, for, or permitted by Lessee on or about the premises, or any obligations of any kind incurred by Lessee, and at all times promptly and fully to pay and discharge any and all claims on which any such lien may or could be based, and to indemnify Lessor and ail of Lease Agreement City of Aspen and Youth Center Page 6 the premises and all buildings and improvements thereon agmnst all such liens and claims of liens and suits or other proceedings pertaining thereto. b. If Lessee desires to contest any such lien, it shall notify Lessor of its intention to do so within ninety (90) days after the filing of such lien. In such case, and provided that Lessee shall on demand protect Lessor by a good and sufficient surety bond, or such other security that is deemed adequate by the City, against any such lien and any cost, liability, or damage arising out of such contest, Lessee shall not be in default hereunder until thirty (30) days after the final determination of the validity thereof, within which time Lessee shall satisfy and discharge such lien to the extent held valid; but the satisfaction and discharge of any such lien shall not, in any case, be delayed until execution is had on any judgment rendered thereon, and' such delay shall be a default of Lessee hereunder. In the evem of any such contest, Lessee shall protect and indemnify Lessor against all loss, expense, and damage resulting therefrom. 10. Maintenance. Lessee shall, throughout the term of this Lease, at its own cost, and without any expense to Lessor, keep and maintain the Demised Premises, including all buildings and ~mprovements of every kind which may be a part thereof, and all appurtenances thereto, in good sanitary, and neat order, condition and repair. Lessor shall not be obligated to make any repairs, replacements, or renewals of any kind, nature or description whatsoever to the Demised Premises or improvements thereon. 11. Access to Premises. Upon at least twenty four (24) hours prior notice, except in cases of emergency, Lessee shall permit Lessor or its agents and employees to enter the Demised Premises at all reasonable hours to inspect the Demised Premises or make repairs that Lessee may neglect or refuse to make in accordance with the prowsions of this Lease. Before entering the Demised Premises to make repairs, Lessor shall give Lessee notice and a reasonable period of time to make necessary repairs. 12. Indemnification of Lessor. Lessor shall not be liable for any loss, injury, death, or damage to persons or property which at any time may be suffered or sustained by Lessee or by any person whosoever may at any time be using or occupying or visiting the Demised Premises or be ~n, on, or about the same, whether such loss, injury, death, or damage shall be caused by or in any way result from or arise out of any act, omission, or negligence of Lessee or of any occupant, visitor, or user of any portion of the Demised Premises, or shall result from or be caused by any other matter or thing whether of the same kind as or of a different kind than the matters or thing above set forth, and Lessee shall indemnify Lessor against al/ claims, liability, loss, or damage whatsoever on account of any such loss, injury, death, or damage. Lessee hereby waives all claims against Lessor for damages to the Demised Premises and improvements that are now or hereafter placed or built on the Demised Promises and to the property of Lessee in, on, or about the Demised Premises, and for injuries to persons or property in or about the Demised Premises, from any cause arising at any time. The last two preceding sentences shall not apply to loss, injury, death, or damage arising by reason of the negligence or Lease Agreement City of Aspen and Youth Center Page 7 misconduct of Lessor, ~ts agents, or employees, subject to those terms, conditions and limitations as contained in the Colorado/mmunity Act, Section 24-10-101, et seq. 13. Provisions Regarding Insurance. a. At its own expense Lessee shall carry and maintain casually and property damage insurance sufficient to protect the full replacement value of the Demised Premises; and b. At its own expense Lessee shall carry and maintain comprehensive general public liability insurance against all direct or contingent loss or liability for property damage, personal injury or death occasioned by reasons of the operation, control or construction upon the Demised Premises, of not less than those specified by Section 24-10-114, C.R.S., as may be amended from time to time, naming the City as additional or co-insurers. Lessee shall maintain said coverage in full force and effect during the term of this Lease. c. Lessee shall furnish the Lessor with a copy of all required insurance policies or certificates evidencing such required coverage. All insurance policies maintained pursuanl to this Lease Agreemem shall contain the following endorsement: d. It is hereby understood and agreed that this ~nsurance policy may not be canceled by the surety until thirty (30) days after receipt by the City of Aspen, by registered mail, of a written notice of such intention to cancel or not to renew. e. In the event full insurance coverage required by this Lease is not maintained as provided for herein, Lessor may, but shall be under no obligation to, purchase the required policies of insurance and pay the premtums necessary and provide for payment thereof and all amounts so advanced therefore by Lessor, if any, shall be added to rent due from Lessee. 14. Damage or Destruction. If prior to the termination of this Lease the Demised Premises or any portion thereof are destroyed, in whole or in part, or are damaged by fire or other casualty, the parties shall cause the Net Proceeds of any insurance claim to be applied to the prompt repair, restoration, modification, replacemem or improvement of the Demised Premises. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to the Lessee. If Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvements, referred to hereinabove, Lessee shall complete the work and pay any cost in excess of the amount of the Net Proceeds, in which case Lessee shall not be entitled to any reimbursement therefore from Lessor. Notwithstanding the foregoing, the parties may agree to other application of such Net Proceeds. City of Aspen and Youth Center Page 8 15. Condemnation. If during the term of this Lease, or any renewal of it, the whole or part of the Demised Premises or such portion as will make the D~aised Premises unusable for the purpose leased, or the leasehold interest, be condemned by public authority, including the City, for public use, then the Lease term granted herein shall cease as of the date of the vesting of title in the premises in such condemning authority, or when possession is given to such authority, whichever event occurs first. Upon such occurrence, Lessee shall not be entitled to any part of the condemnation proceeds, if any, for the value of the unexpired term of this Lease or for any other estate or interest in the Demised Premises, such amount belonging entirely to the Lessor. 16. Lessee's Option to Terminate. Lessee shall have the right, by written notice to the Lessor given at least 90 days prior to its intention to do so, to terminate and surrender its leasehold interests hereunder to Lessor, and on such effective date Lessee shall be relieved from ail further liability hereunder, subject to the Remedies On Default provisions of this Lease which shall apply as if a Default had occurred. 17. Abandonment of Premises. Lessee shall not vacate or abandon the Demised Premises at any time during the term hereof; if Lessee shall abandon or surrender the Demised Premises, or be dispossessed by process of law, or otherwise, any personal property belonging to Lessee and left on the Demised Premises shall be deemed to be abandoned, at the option of Lessor, except such property as may be encumbered to Lessor. 18. Events of Default Defined. The following shall be "Events of Default" under this Lease and the terms "Event of Default" and "Default" shall mean, whenever they are used in this Lease, any one or more of the following events: a. Failure by the Lessee to pay any rent or other payment required to be paid herein at the time specified; or, b. Failure to use the Demised Premises for a period of ninety (90) consecutive days for the purpose or purposes set forth in the Use of Demised Premises provisions of this Lease; provided, however, that time spent for the purpose of maintenance, remodeling, or repairs to the Demised Premises and/or for events beyond the control of the Lessee shall not be counted; or, c. Failure by the Youth Center to observe and perform any covenant, condition or agreement on its part to be observed or performed, unless the Lessor agree in writing to an extension of time or waiver prior to its expiration; or, d. Lessee's interest in this Lease or any part hereof is assigned or transferred without the written consent of the Lessor, except as provided herein, either voluntarily or by operation of law or otherwise; or, Lease Agreement City of Aspen and Youth Center Page 9 e. A proceeding under the United States Bankruptcy Code or any federal or state bankruptcy, insolvency, or similar law or any law providing for the appointment of a receiver, liquidator, trustee or similar official for the Lessee or of all or substantially all of its assets, is instituted without its consent and is not permanently stayed or dismissed within sixty (60) days, or if the Lessee offers to the Lessee's creditors to effect an extension of time to pay the Lessee's debts or asks, seeks or prays for a reorganization or to effect a plan of reorganization, or for readjustment of the Lessee's debts, or if the Lessee shall make a general or any assignment for the benefit of the Lessee's creditors; or, f. Lessee abandons or vacates any part of the Demised Premises. 19. Remedies on Default. a. Whenever any Event of Default shall have happened and be continuing the City shall have the right at its sole option and discretion, to notify Lessee of the Event of Default and require Lessee to cure the Event of Default within a reasonable period of time or suffer termination of the Lease and the Remedies of Default as provided herein. If Lessee fails to cure, or it is impossible to cure, the City may declare the Lease terminated. b. Upon termination of this Lease, the parties hereto shall cooperate in ensuring that the following remedial steps shall take place in an expeditious and efficient manner: (i) Lessee shall promptly pay to Lessor all rent or other monies due it pursuant to the terms of this Lease. (ii) The Lessor shall have a right to purchase the Demised Premises and any improvements there on at a Purchase Price of no more than that determined and calculated in accordance with the Purchase Price provisions set forth hereunder. In the event that the City chooses to exercise its individual right to purchase the Demised Premises from the Lessee, the City shall pay to the Lessee the Purchase Price as determined and calculated herein within ninety (90) days of tenuinatiun and shall receive title to the Demised Premises along with all improvements and appurtenances. (iii) In the event that the City chooses not to purchase the Demised Premises within ninety (90) days of termination, the City may choose, in its sole discretion, to do any of the following: A. Extend the Lease term to the Youth Center. The terms and conditions of any extended Lease to the Youth Center shall be subject to renegotiation by the parties hereto at the time of Lease Agreement City of Aspan and Youth Center Page 10 the extension of the Lease. Until such time as the parties agree upon an extended Lease, the term shall be deemed to be on a month to month basis and all of Lessee's obligations under this Lease shall continue unabated. B. Designate a non-profit entity or the City to sublet the premises' from the Youth Center. The terms and conditions of any sub-lease agreement between the Youth Center and the designated non-profit entity shall be subject to prior approval by the City. The City during the term of the sub- lease with the designated non-profit entity, shall continue to have the option to exercise its respective right to purchase the Demised Premises from the Youth Center at a Purchase Price established in accordance with Section 19 herein. So long as the Youth Center is not dissolved or disbanded, the Youth Center shall be entitled to receive rental proceeds generated pursuant to the terms of the sub-lease; provided, however, that the amount of any such rental proceeds received by the Youth Center shall be subtracted from the Purchase Price established ~n accordance with Section 20 herein. Lessee shall take ali necessary and reasonable steps, including the grant of complete access to the Demised Premises, to assist Lessor in any efforts it may choose to undertake to renovate, remodel, or alter the Demised Premises to enhance its utility, marketability, or for any other purpose. C. Require the Youth Center to make a good faith effort to sell the Demised Premises to an entity acceptable to the City subject to the terms and conditions of this ground lease agreement. 20. Purchase Price. a. Whenever it shall become necessary to establish a Purchase Price for the Demised Premises, said price shall be calculated in accordance with this section. i. If the parties are unable to agree upon an appraiser, each shall nominate an appraiser and the two appraisers so nominated shall engage a third appraiser who shall resolve all conflicts that may arise during the appraisal process, including, but not limited to the final value. ii. The appraisal shall be based upon the fair market value of a leasehold interest in the Demised Premises for a period of time equal to the remaining period of time of the term of the then existing lease plus any option that the Youth Center may have to extend the term of the lease. City o£Aspen and Youth Center Page 11 ii~. The appraisal shall be based upon the condition of the Demised Premises and the Demised Premises at the time of the appraisal. 21. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity. No delay or omission hereunder shall impmr any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. 22. Non-Discrimination. The parties hereto agree to comply with all laws, ordinances, rules and regulations that may pertain or apply to the Demised Premises and its use. In performing under this Lease, Lessee shall not discriminate against any worker, employee or job applicant, or any member of the public, because of race, color, creed, religion, ancestry, national origin, sex, age, marital status, physical handicap, affectional or sexual orientation, family responsibility or political affiliation, nor otherwise commit an unfair employment practice. 23. Attorneys' Fees. If any action at law or in equity shall be brought to recover any rent under this Lease, or for or on account of any breach of, or to enforce or imerpret any of the covenants, terms, Or conditions of this Lease, or for the recovery of the possession of the Demised Premises, the prevailing party shall be entitled to recover from the other party as pan of the prevailing party's costs reasonable attorneys' fee, the amount of which shall be fixed by the court and shall be made a pan of any judgment or decree rendered. 24. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: If to the Youth Center: Aspen Youth Center PO Box 8266 Aspen, Colorado 81611 Attention: Executive Director With a copy to: Rhonda Bazil, Esq. 632 East Hopkins Aspen, Colorado 81611 If to City: City of Aspen, Colorado 130 South Galena Street Aspen, Colorado 81611 Attention: City Manager Lease Agreement City of Aspen and Youth Center Page 12 With a copy to: City of Aspen, Colorado 130 S; Galena Street Aspen, Colorado 81611 Attention: City Attorney 25. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the Lessor and the Lessee and their respective successors and assigns. 26. Severability. In the event any provision of this Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. 27. Amendments. The terms of this Lease shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the City and the Youth Center; 28. Execution in CounteCarts. This Lease shall be executed in three counterparts, each of which shall constitute but one and the same instrument. 29. Applicable Law. This Lease shall be governed by and construed in accordance with the laws of the State of Colorado. 30. Captions. The captions or headings in this Lease are for convenience of reference only and in no way define, limit or describe the scope or intent of any provision or sections of this Lease. 31. Waiver. The waiver by Lessor of, or failure of Lessor to take action with respect to any breach of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition, or subsequent breach of the same, or any other term, covenant, or cOndition therein contained. The subsequent acceptance of rent by Lessor or the acknowledgement by Lessor of Lessee's exercise of an option to renew the term of the Lease as provided herein shall not be deemed to be a waiver of any preceding breach by Lessee of any term, covenant, or condition of this Lease, regardless of Lessor's knowledge of such preceding breach. 32. Entire Agreement. This Lease constitutes the entire agreement between the City and the Youth Center. No waiver, consent, modification or change of terms of this Lease shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein regarding this Lease or the Demised Premises leased hereunder. 33. Further Assurances. The parties agree to execute and deliver such additional documents and agreements as necessary to carry out the intent of this Lease. Lease Agreement City of Aspen and Youth Center Page 13 33. No Third Party Beneficiaries. This Lease is not intended to create any right in or for the public, or any member of the public, including any subcontractor, supplier or any other third party, or to authorize anyone nor a party to this Lease to maintain a suit to enfome or take advantage of its terms. The duties, obligations and responsibilities of the parties to this Lease with respect to third parties shall remain as imposed by law. IN WITNESS WHEREOF, the City has executed this Lease in its name with its seal hereunder affixed and attested by its duly authorized officers, and the Youth Center has caused this Lease to be executed in its name and attested by its duly authorized officer. All of the above occurred as of the date first written above. CITY OF ATTEST: H et~n,,l(a lj41'll~l ay~ff~d, ~i~ lerk ASPEN YO~H CENTER WIT~SS: Lease Agreement City of Aspen and Youth Center Page 14 EXHIBIT LIST TO LEASE AGREEMENT Exhibit A - Legal Description of Demised Premises Exhibit B w Calculation of Changes in Urban Index JPW- 10/22/2001 -G:\john\word~agr~youth_center.doc City of Aspen and Youth Center Page 15 EXItIBIT ~B" CALCULATION OF CHANGES IN URBAN INDEX The term "Urban Index" used herein shall refer to the Consumer Price Index - All Urban Consumers (CPI-U), U.S. City Average, All Items ( 1967 = 100) compiled by the United States Department of Labor, Bureau of Labor Statistics. By way of identification, the parties agree that the CPI-U index number for July 1993 = 432.6. If at the time of computation as provided below the Urban Index as defined is not then being currently published, the parties shall mutually select a substitute index which has historically approximated the Urban Index as defined. The parties further agree that the methodology they will use for calculating index changes in the Urban Index is that described in the instruction sheet from the Bureau of Labor Statistics, U.S. Department of Labor, which reads as follows: CALCULATING INDEX CHANGES Movements of the indexes from one month to another are usually expressed as percent changes rather than changes in index points, because index point changes are affected by the level of the index in relation to its base period while percent changes are not. The example in the accompanying box illustrates the computation of index point and percent changes. Percent changes for 3-month and 6-month period are expressed as annual rates and are computed according to the standard formula for compound growth rates. These data indicate what the percent change would be if the current rate were maintained for a 12- month period. INDEX POINT CHANGE CPI 315.5 Less previous index 303.5 Equals index point change 12.0 PERCENT CHANGE Index Point difference 12.0 Divided by the previous index 303.5 Equals 0.040 Results multiplied by one hundred 0.040 x 100 Equals percent change 4.0 EXHIBIT "B" to Contract to Purchase and Lease City of Aspen Youth Center 1. Plans (attached) A2.3.1 Upper Level - Youth Center Reflected Ceiling Plan A5.2 Building Sections A5.3 Building Sections A7.3 Interior Elevation Details A7.4 Interior Elevation Details A7.5 Miscellaneous Details A7.7 Ceiling Details A7.8 Cabinet Details AS. 1 Room Finish Schedule A8.2 Door Schedule, Door Types & Elevations A8.3 Window Schedule, Window Types & Elevations A9.3.1 Youth Center Finish Plan 2. Specifications Materials as show on plans Lighting fixtures to be chosen from option list at Rising Sun Lighting, Basalt, CO. 3. Cost Estimate (GMP Estimate Dated 18MAY01 - attached) 4. Schedule Final schedule TBD. Estimated completion DEC02 -JAN03 5. Location- 861 Maroon Creek Road 6. Onsite Improvements The Youth Center will be an autonomous facility within the Iselin Pool and Ice Facility. Onsite improvements available to Youth Center participants will be limited to the entry, main parking area, food service, and other facility common areas. Hours of operation will be subject to those of the facility as a whole with exceptions arranged with the facility management.